A Case Study on Copyright Issues in Multimedia Products

 

Jerry Feng Xia

 

 

The Center for Intellectual Property Law (CIER)

Utrecht University, the Netherlands

2002.1 – 2002.5

 

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[Facts]

 

1.  The Modern Art Museum (MAM) is considering developing an interactive digital multimedia exhibition catalogue to be published under the name Arti-Facts.

a)      The catalogue will contain image and text from the museum collections. Some of the images are bought by and owned by the museum, some of them are developed by and for the museum with appropriate transfer to it of ownership and copyright. Other images are licensed to and by the museum from third parties (such as artists and collectors) for all museum purposes including without limitation note-cards and posters.

b)      The collected texts are prepared by both employees of the museum (such as curators) and free lancers (such as outside consultants).

c)      The catalogue will be driven by underlying software that is partly standard and commercially available and partly customised and specially developed for the museum by a software house,

d)      The catalogue is to be viewed on 6 workshops located on different places throughout the museum. It is also contemplated to distribute the catalogue via physical media (such as compact discs) and via electronic media (such as the Internet e-mail system).

2.  Your advice is asked for by MAM as to the copyright issues that are at stake when developing a catalogue as indicated under 1.

 

[General Discussions]

 

We understood that this case involves a cutting-edge copyright topic in the world, i.e., the copyright issues in multimedia products. Multimedia information products usually combine a multiplicity of underlying works on a single medium that are protected by copyright laws, for example, graphics, film, video, music, photographs, paintings, animation, text, data, maps, games, and computer software. Therefore, the copyright problems in multimedia products are made very complex by considering a fact that these pre-existing works are always separately owned by a multitude of copyright holders, exercising a multitude of - sometimes overlapping - rights. In practice, adding to the producer's difficulties, right owners will usually belong to different segments of the entertainment and information industry (literature, performing arts, music, cinema, software, education), applying different licensing practices. Imaginably, quite many copyright disputes may thus frequently take place between multimedia publishers and original copyright owners. According to the Financial Times "a battle between copyright holders and multimedia publishers threatens to obstruct the emerging market".[1]  This battle is becoming even more contentious in light of the rapid development of the so-called “information superhighway”, the telecommunications infrastructure of the future. For instance, a feature problem facing multimedia producers in this computer age is to identify the party that holds the electronic rights in a particular work to be included in a multimedia production.[2]

 

As can be envisaged, an issue of the highest priority in multimedia development is thus to get rights, i.e., to ensure that the publisher or owner of a multimedia product owns copyright in all components of the product, or if he cannot own copyright in some components, to ensure that at least it is authorised to use those components in accordance with the intended use of the product. Very commonly copyright transfer or authorisation could be the usual case in practice, which may take place in the form of a copyright assignment contract (erga omnes effect, i.e., effect against the third parties/infringers) or a copyright licensing contract (relational effect, i.e., no effect against the third parties/infringers). Depending on the complexity of the product and the number of persons involved in its production, a number of copyright clearances or authorisations may be required. Failure to obtain just one of those clearances or authorisations is capable of preventing use of the product if objection is raised by the relevant copyright owner. From the multimedia producers’ perspective, a few general questions shall then be figured out in the process of acquiring rights, for example: 1) Who are appropriate right owners (e.g., employees, commissioners, etc.)? 2) What rights shall be acquired for the purpose of producing the multimedia product (e.g., reproduction including digitalisation, adaptation, communication, distribution, use, etc.)? 3) What is the most appropriate vehicle to acquire rights (e.g., assignment or license)? 4) What are the potential contractual issues underlying a copyright assignment or license (e.g., right to claim in case of infringement, indemnification clause, etc.)? Etc. Answers to these questions are vital to concluding an appropriate agreement for obtaining rights.

 

What’s more, in the future exploitation with third parties the multimedia publishers may need to identify what legal rights or prerogatives are exactly enjoyed in their published multimedia products, for example, copyright or/and database rights (sui generis rights), and what protections may be expected by formulating the terms and conditions of use with intermediaries and end-users.

 

[Some Special Considerations in the MAM Case]

 

In the MAM case, based on above general discussions, a few copyright issues that are at stake, whether of traditional copyright nature or with specific reference to multimedia environment, may be taken into special considerations when developing a multimedia museum catalogue as such. The issues may be looked at under different copyright regimes in order to conduct a comparative study.

 

1. Ownership v. Authorship

 

The materials that MAM uses to develop this multimedia catalogue first comprise images bought and owned by the museum itself. Does it mean that MAM has no copyright problem using these images? This is not always the case. One of the major misunderstandings of the complex law of copyright is the belief that the owner of a work of art may do with it as he or she pleases. But in fact ownership of a work is different than authorship. One may pay enormous sums of money for a work of art, but that doesn't mean that the copyright on the artwork is thereby transferred. In most jurisdictions transfer of copyrights have to be explicit, i.e. in writing. For example, Chinese Copyright Law regulates that “the contracts with copyright owners and the license obtained for using their works shall be made in written form.”[3]  In some jurisdictions, for instance in Germany, copyright cannot be transferred at all. As a result, the owner of a copyrighted work still needs to obtain the copyright holder’s permission for a number of uses of the work.

 

Having realised this, MAM should bother to check whether there would be certain third parties who might be entitled to claim for copyrights over the image works it owns and would use to produce the catalogue. MAM may at the same time check whether these image works are part of the public domain or whether they are still with the copyright protection term of the works. Following a 1993 Council Directive[4], the term of copyright protection with the EU has been extended to "author’s life plus seventy years"[5] while in most other countries such as China it is still "author’s life plus fifty years". Once there are potential copyright owners, appropriate authorisations shall be requested in order to ensure no potential infringement would take place.

 

2. Re-check of Former Licenses or Transfers:

 

Regarding other images and materials for which MAM already has copyright transfers or licenses from third parties, it is still necessary to consider whether the proposed use of the images falls within the frame of the former licenses. Particularly, it shall be made clear that whether these licenses include moral rights and electronic rights consideration

 

a)   Moral rights

 

In all Berne Convention states authors enjoy specific rights to protect their works against distortion. These moral rights are mostly inalienable; they cannot be transferred or assigned. In view of the endless possibilities of digital manipulation, both by the multimedia producer and the end user, the risks of moral rights infringement are substantial. Therefore, in many cases additional licenses must be secured directly from the authors of works underlying the multimedia product.

 

b)   Electronic Rights

 

If the former transfer was made and executed in analogue times, then how it could be interpreted in the light of multimedia exploitation, whether offline or online? In some countries such as France the original grantor has a right to receive a "proportional" remuneration from the copyright owner for unforeseen forms of exploitation. In other countries such a transfer may be narrowly construed in favour of the original grantor or licensor. Thus, a transfer of "all copyrights" to a book publisher will probably not include electronic rights, if publishing in electronic form was not originally intended. For example, Article 26 of the Chinese Copyright Law provides that the licensee “shall not, without permission from the copyright owner, exercise any right that the copyright owner has not expressly licensed or assigned in the licensing and assignment contract.”[6] However, it was not until 2001 that the right of communication of information on networks was recognized by Chinese Copyright Law as an exclusive right of the copyright owner.[7] In practice a few cases have revealed that a broad transfer of rights in non-electronic times may not be further interpreted to include digitalisation rights and network transmission rights. 

 

Thus in this case MAM should have a close look at the existing licenses and transfers and make sure if extra authorization for digitalisation and online distribution of the materials will be needed. At this same time it is strongly advised to insist on solid warranties and indemnification clauses from parties claiming to own electronic rights in its prospective licenses and transfers.

 

3. Employment and Commissioner Works

 

Potential copyright issues may advent in relation to the texts prepared by the MAM employees as employment works and the computer program developed by the software house a commissioner work. As regards the copyright ownership of a work created in the course of employment, different jurisdictions may have different practices. For instance, in the Netherlands, “where labour carried out by an employee consists in the making of certain literary, scientific or artistic works, the employer shall be deemed the author thereof.”[8] Thus MAM shall automatically own the copyright of the texts prepared by its employees. However, the employee would instead be regarded as the author under the Chinese Copyright Law. Article 17 of the Chinese Copyright Law provides that subject to some special situations prescribed by the law the copyright in an employment work shall be enjoyed by the employee who created the work, provided that the employer shall have a priority right to exploit the work within the scope of its professional activities. The second paragraph of the same article specifies the special situations where the author of a work created in the course of employment shall enjoy the right of authorship, while the employer shall enjoy other rights included in the copyright and may reward the author: drawings of engineering designs and product designs and descriptions thereof; computer software; maps and other works created in the course of employment mainly with the material and technical resources of the legal entity or other entity and under its responsibility as well as other situations prescribed by laws and administrative regulations or contracts.[9] In this case, texts do not fall within the special situations and therefore licenses from the authors may be deemed necessary in accordance with the Chinese Copyright Law.

 

With regard to the software that is developed to drive the catalogue, we need to divide the issue. Authorisation from the copyright owner may be required for the reproduction of the standard part. The customised part that is specially developed for the museum shall, however, be considered as a commissioned work. In most countries, for example, in China, the ownership of copyright in a commissioned work shall be agreed upon in a contract between the commissioning and the commissioned parties. In the absence of a contract or of an explicit agreement in the contract, the copyright in such a work shall belong to the commissioned party. In this case MAM understandably shall enjoy the copyright in this customised part. Likewise, the texts contributed by outside free lancers can also be looked at as commissioned works.

 

4. Separate Legal Protection

 

An added problem with multimedia development could be the legal protection of the finished multimedia product in its prospective exploitation. As a matter of fact multimedia products are not the subjects of separate copyright protection under most copyright regimes in the world. This means that if MAM wishes to protect this multimedia catalogue in entirety it must be able to classify this catalogue under an existing category of copyright protection. Depending upon the nature of the product, it could be classified as a computer program, a compilation (database), or a cinematograph film. The issue is important for two reasons: First, the scope of protection for the product is dependent upon its copyright classification. For example, if the product is classified as a cinematograph film, the rights available (in essence being confined to a right to prevent piracy) are significantly fewer than those available if the product is classified as a computer program. Thus this may vitally affect drafting its exploitation contracts with third parties. Secondly, there may be elements of the product, which do not even have separate copyright protection, such as design and functionality. Some copyright regimes may not appear to have this classification problem because the definition of 'audio-visual works' is wide enough to extend to interactive multimedia works.

 

[Some Further Remarks]

 

Despite aforementioned difficulties, the multimedia industry is growing at a significant rate all over the world and is generating tremendous wealth. On the hand, if due attention has not been paid to the copyright clearance for producing multimedia products, then we may see a spate of litigation by the owners of underlying copyrights. On the other hand, appropriating and strengthening the legal protection of multimedia works are also of great importance. Not only in western countries, more and more developing countries are gaining concerns about the copyright issues involved in multimedia. For example, the newly revised Chinese Copyright Law added several clauses with reference to an author's right to exploit their work on the Internet and prohibitions against unauthorised distribution of works on the Internet. Besides, the new amendments also included clarification of the owner's right of exploitation by the addition of more specific rights, such as the right to reproduce, distribute, publicly perform, or broadcast the work.[10] One change of interest is the right to rent, which was designed to deal with the rampant unauthorised rental of audio-visual products in China.[11] Such amendments would presumably give owners another causes of action to sue against multimedia piracy.

 

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